The Daily Alaska empire Newspaper, January 17, 1935, Page 5

< THE DAILY ALASKA EMPIRE, THURSDAY, JAN. 17, 1935." FULL TEXT OF GOVERNOR'S MESSAGE T0 LEG To the Twelfth Alaska well as the local trades people. It has been suggested tha Legislative Assembly: |the sales tax ought to be levied on goods shipped to the The Organic Act makes it the duty of the Governor Territo_ry, rather.than on goods sold at retail. However, to make suggestions to the Legislature, recommending there is a question whether that could be legally done. legislation. This message is an attempt to comply with The sales tax is a matter which I urge the Legislature that duty. I shall be brief. You will have reports to consider very seriously. from the various Territorial officers and boards which! A motor gas tax has been suggested. It has been constitute the source of most of the detailed information Strongly urged on governmental agencies that a tax that you will need in your work. These reports have been'should he levied on gas used in airplanes to produce funds carefully prepared with ‘intelligent and factual background by the Territorial officers and boards, and T know you will study them thoroughly and through this receive much gainful knowledge relative to the work that has been and is being done for the Territory by officérs and boards. The wise mariner, particularly after a storm, before changing course, takes observation and Vasce}'tams the position of his ship.: Probably the first thifg in the survey of our present situation would be to briefly recount the progress of the last biennium. 7 Mr. Walstein G. Smith, Territorial Treasurer, has said in his annual report, “It can safely be said that the treas- ury has materially improved in the last two years.” December 31, 1932, the treasury cash balance was $239,953.40. On December 31, 1934, the cash balance was $457,109.90. In addition to that, without selling any part gf the $225,000 bonds in the treasury, $189,000 has been paid out on the construction of the Pioneers’ Home. Therefore, the surplus now, cash and bonds, amounts to approximately $685,000. This includes $178,600 in United States bonds drawing 3 3/8¢% interest and $40,000 in Wrangell School Bonds drawing 6% interest. Owing to the increase in the salmon pack in 1934, it is estimated that the taxes from this pack, collectable in 1935, will be $200,000 greater than they were in 1934, The income for the last biennium was $577,030.76 more than the income for the previous biennium. We have now some $52,000 in delinquent taxes due the Territory. Of this, payment of about $19,000 is ex- pected at an early date. The Commissioner of Fisheries has indicated that seventy-five traps will be eliminated this year which will cut off $15,000 from the trap license fees. * The Com- missioner of Fisheries has also indicated the possible clos- ing of the Bristol Bay canneries this year. The eshmatgd loss there will be between $340,000 and $400,000. This loss in the salmon tax will not appear until 1936. There will be a deficiency of $14,500 on bounties on predatory| animals and eagles and in the old age allowance of about $25,000. ed to pay the allowances for the next quarter. My attention has been caiied to the vast number of patented mining claims in the Territory that have been completely abandoned and are at the present time use- less to the Territory or individuals and also in many cases are hindering development in numerous ways. Many of these are owned by corporations that have gone out of business and a considerable number of others are owned by individuals who have been dead for many years or have moved away from the Territory permanently. It has been suggested that these properties be escheated to the Territory. If the Territory acquires title to these claims through escheat, many of-them undoubtedly eould be sold for mining purposes. Through the increased price of gold, no doubt a considerable number of them could now be profitably worked. Further, a considerable number could undoubtedly be sold for settlers’ homesites or for agricultural purposes. In other words, through this pro- cedure, much new land would be opened for varied devel- opment. This would not only offer ad(}itional opportunity for people to make homes and a living in Alaska, but through the sale of the claims an additional source of revenue to the Territory would be created. : The policy of the Territory after the beginnmg of the depression, probably wisely, was to wait out the depression and to hold expenses and governmental activ- ities down so that costs would be as low as possible. Dependence was based upon the theory that prosperity for the general country was in the offing and that Alaska with exhaustless resources, and debtless, had only to wait for its return to begin a new era of development. It would come as a natural consequence. Under the present Administration, however, the Na- tional Government is attempting to encourage the return of prosperity by solving the unemployment problem through getting people on payrolls. In this manner, it is hoped that the demand for materials and products of all kinds will set the wheels of industry in motion. The re- turn of prosperity in one industry will create markets for the produets of other industries, and it is hoped by this method that in a short time all the industries will become active. The serious problem for the Territorial Legislature to consider is how great a part will the Territory take in this process. How far will it depart from the policy of waiting for the good timeés that we all expect to come, or how much will it contribute to increase employment. I think we may expect considerable help from the Federal treasury through Public Works in the future. Tbe Presi- dent has indicated a desire for large Federal Public Works activities for at least two years longer. He has asked for four billion dollars to bear the cost of such a_ program throughout the nation. But in order to participate in these Public Works, it is expected that we contribute according to our ability. Already therg are intimations that we ought to aid as liberally as possible in developing air transportation, through which new money, activity and general development will accrue. On the other hand, the Federal Government is plan- ning to retire in a large degree from its direct relief and work relief to the needy, leaving that to the local, State, Territorial and municipal governments. In plag\mpg public expenditures, the Legislature should take this into con- sideration. The -present Administration has undertaken to see that in the Territory no one shall suffer from hunger or lack for shelter or warm clothing if it can be preven’ged. We must be prepared to carry on as efficiently as poss_lbl.e that policy even after the Federal Government retires, if it does, from the field. 1 % This situation suggests that the T_erntory_ ough_t,. if practicable, to plan for other sources of income in addition to those which we now have. This is a very difficult prob- lem to solve, because we cannot afford to overtax indus- tries that we now have. To do that would be to discourage the investment of capital for the development of our natural resources. We depend upon further develop- ment, the establishment of more industries, to produce more employment and to add to the Territory’s popula- tion, which, of course, is our greatest material need. The sales tax has been suggested as a desirable source’|in mind that we must not overburden any of our indus-|ment carried out. of income. The sales wax is being tried in more States all the time. It presents some very difficult problems, it must be admitted, including its tendency to increase food costs. A sales tax, if adopted, ought to be so designed that it would not encourage mail order buying. In other words, the mail order houses should be reached by it a8 Of this old age allowance deficiency about} $1,500 has already accrued and about $23,000 will be need- to pay for aids to air navigation. Others have suggested in like manner, that proceeds of a tax on gas used by auto- mobiles might be used for road and street development and one on gas used by water craft might be used for development of small boats harbors and other water navi- gation improvements. 1 urge that this matter also be considered by the Legislature very carefully. Considerable sentiment has developed throughout the Territory in favor of an increased tax on mining—par- ticularly gold mining. This is particularly a matter that ought to be carefully considered. Existing mining opera- tions constitute the greatest activity in large areas of the Territory where it is the source of support for the people. I do not believe that we should cripple this in- dustry, nor should we place burdens upon the mines that would result in keeping away capital that might other- wise be invested in opening up mining properties. However, the mines could probably stand more taxation in view of the increased value of gold. Of course, there is a last resort—a real estate and personal property tax, upon which most States rely for the larger part of their incomes. Various objections have been raised to this for Alaska. Chief among them is the difficulty that could arise in the way of levying and collecting such taxes. The preparation of a fair and equit- able assessment roll for the Territory would be a huge and costly task. The property is widely scattered over vast areas. Yet, I believe the Legislature should consider the matter carefully, because while you may be able to adjust appropriations to meet the anticipated revenues for this biennium, the time is fast approaching when there must be a larger Territorial income. LABOR I believe the Legisiature will and ought to give care- ful consideration to the welfare of working people in Alaska. All of you have been in direct contact with the workers in your several districts and I am confident that ‘you will protect their best interest. Working men and women constitute the largest element in our population. We wish to make conditions so working men and women will wish to live in the Territory and rear families {here under the most favorable circumstances. In connection with this, I think it is advisable to . oint out, what you already know, that the welfare of the workers is closely allied with the welfare of our industries, and that for the steady and assured growth and develop- ment of the Territory and for the continued and increased welfare of labor, industries now here and possible new ones must be encouraged. tries can we hope to work cut of this depression and insure 1future economic welfare. FISHERIES Acquisiticn vi.control of fisheries by the Territory is very importantly. desirable. However, the Territory has so much to do that will require money, and time and organized effort that I believe it would be better for it to take over fisheries control piecemeal rather than at one fell swoop. It seems to me that the wished for end could be reached through Federal legislation giving the Territorial Legisla- ture authority to legislate on the fisheries question co- equally with Congress through amendments to existing laws or the enactment of new legislation. In this way, the administration of the Department of Commerce, through its Bureau of Fisheries, which costs nearly a quarter of million dollars annually, could be retained until its functions might be absorbed by the Territory as need for action presses. It would give the Territory opportunity to proceed carefully and avoid creating chaotic conditions. It must be remembered that fishing and handling fisheries products are going industries employing vast numbers of people and large investments. It is important that those employed in these industries be able to make a continuous living in their work and that the capital’ employed con- tinue to earn fair returns, so that employment may be msi:jtained and increased and Territorial revenues pro- vided. The most serious problem confronting the fisheries industry is that of marketing the fish products. It seems to me essential that there should be an advertising cam- paign - throughout the country to call attention of the people to the desirability of fish as food. We ought to profit by the experience of California, Washington and Oregon in that respect. Markets for many food products have been developed through vigorous and effective na- tional advertising. Our fisheries ought to profit by that experience. Of course, the logical way to meet this situation would be for the canneries and other producers jof fish to advertise for markets themselves. However, there is a growing sentiment among the fisheries that the Territory ought to take charge of this matter and have a special tax to produce revenues to carry it into effect. The fisheries are the source of most of the Territory’s revenue and the people are vitally interested in the welfare of the industry. Recent news reports advise that the canners have imposed a can tax to take care of national advertising. t However, the proposition is still worthy of your study and attention, because through the results of proper advertising, the market value of canned salmon can be increased and sustained and through this, the people in the Territory working in the fisheries industry will be benefited through the resulting increased price for raw fish and the ability of canners to pay better wages. MINING Our mining industry, particularly gold mining, rank- Only through fair treatment of both labor and indus-| organization have adequate funds to give us full ad- vantage of the reaction from this increased value. | | TOURIST TRAVEL | The Territory ought in every way possible to en-| courage tourist travel in Alaska. It is a constantly grow-| ing and profitable industry which is now bringing and| can bring much more money into the Territory. Our| relatively close neighbors, California, Washington, Oregon | and British Columbia have incorporated organizations for the sole purpose of promoting tourist travel to their sections. Available figures show the splendid results that these organizations have produced, and profitable industries that have been built up in those sections. Some of these organ- | izations receive assistance from State and municipal gov- ernments to further travel business. ! Alaska is unique and stands out as one of the great tourist areas of the world. Properly developed, the tour- ist business can become one of our most important industries. In addition to the direct benefits received from increased travel many who come as tourists later invest money in the Territory and build up industries to develop and utilize natural resources, producing employment. The famous resorts of Europe, Florida, California, Hawaii and numerous sections of the United States and Canada are examples of the importance of the business. While T am not making any specific recommendations on‘this subject, I wish the Legislature would give it serious attention. LIQUOR One of the difficult problems confronting government in Alaska is regulation of the liquor traffic. The last Legislature provided for handling beer and light wines through licenses issued by the District Courts. This legis- lation was in effect when the Liquor Board, created to make rules and regulations to handle so-called hard liquors 'whenc\'er Congress would repeal the Alaska prohibition law, came into being. The Liquor Board, a creature of the Legis- lature, thought it would not be in good taste, even if desirable, for it to attempt to interfere with what the Legislature had done in the premises, so it confined its efforts to providing rules and regulations for the sale and distribution of hard liquor. It was confronted by the necessity first of all to provide a system that would make liquor accessible to all the people at a reasonable price. One of the first objects to be attained, the Board felt, wes to make liquor readily accessible and prices so reasonable that bootlegging would be unprofitable. The Board felt that it was desirable that illicit liquor be eliminated by making it so that people could get legalized liquor easily and inexpensively. For that reason, it made a nominal fee for liquor licenses, enough to provide for revenues for extra police costs in the municipalities, but without large profits either to the Territory or the municipalities. At that time pressure was brought on the Board to provide for public owned liquor stores. The Liquor Board dis- carded that plan and adopted the license system for two reasons: One was that the Board did not have in its control {funds with which to buy supplies and set up a public EGISLATURE get the Bureau of Forestry to provide a contract for | the purchase of timber for pulp wood that would be accept- able to those with the money to invest in the industry. That object had been ‘attained when the depression came on. Then the demand for paper decreased and the develop- ment of the pulp and paper business in Canada had reached such proportions that the supply exceeded the demand and the price of paper was reduced to such a point that the business had become unprofitable. Since then all effort« to interest capital in pulp and paper in Alaska have becn futile. This situation suggested the idea, which has beei advanced in various parts of the country, that a tariff be placed on imported paper high enough to restore the American markets to American manufacturers. Efforts along that line have been difficult due to the circumstance that users of paper in the United States have been more interested in cheaper paper than they have been in extend- ing American employment. However, there is again a movement under way in favor of a protective tariff for the benefit of American manufacturers and American em- ployment. The Ketchikan Chamber of Commerce recently inaugurated a campaign to bring pressure in favor of such a tariff. Development of the timber resources of Alaska would go a long way in increasing the population of the Territory. The pulp and paper business every- where it has been established has resulted in general devel- opment and increased population of the sections where established. Pulp and paper manufacturers employ very large numbers of people in the mills and in logging. I believe that the Territorial Legislature ought to adopt a memorial urging the President and Congress to impose ‘a tariff tax on importations of both pulp and paper. COOPERATIVE SCHOOLS AND WELFARE WORK An Act passed by Congress approved April 16, 1934, authorized the cooperation of the Federal Government and States and Territories in the “education, medical attention and relief of distress and social welfare of Indians.” The terms of the law provide: “That the Secretary of the Interior is hereby author- ized, in his discretion, to enter into a contract or contracts with any State or Territory having legal authority so to do. for the education, medical attention, agricultural assist- ance, and social welfare, including relief of distress, of Indians in such State or Territory, and to expend under such contract or contracts moneys appropriated by Con- gress for the education, medical attention, agricultural assistance, and social welfare, including relief of distress, of Indians in such State. “Sec. 2. That the Secretary of the Interior, in mak- ing any contract herein authorized with any State or Territory, may permit such State or Territory to utilize for the purposes of this Act, existing school buildings, hos- pitals and other facilities, and all equipment therein or appertaining thereto, including livestock and other per- sonal property owned by the Government, under suth terms and conditions as may be agreed upon their use and maintenance. “Sec. 3. That the Secretary of the Interior is hereby authorized to perform any and all acts and to make such rules and regulations, including minimum standards of | control of the business; ! The other was 10r the purpose of keeping the Terri- tory and its municipalities out of the liquor business. The policy of the government is to keep out of business except as a last resort. If it is possible, the liquor business ought to be in the hands of private individuals to the same extent as the grocery, hardware, drug or any other business. Generally speaking, there have been very few com- plaints about the handling of liquor in the Territory. Such complaints as have been received have been in con- nection with the beer parlors, and have to do with the enforcement rather than the regulations. I am still of | the opinion that the Territory would make a mistake if |it entered the retail liquor business. The license system has made it so that manufacturers, distillers, and brew- ers are permitted to sell directly to retail dealers. That puts the wholesale business on a competitive basis. It practically places the sale of liquor, the quality, brands of the goods, etc., and the prices charged, in the hands of the trade and its customers. Naturally, the consumer becomes the judge and largely controls the selection of liquors to be distributed. Territorial stores would throw open the doors for graft in connection with the sale and purchase of liquors. That is something that could be, of course, guarded against through selection of the proper people to handle Govern- ment stores. But as certainly as night follows day, it would lead to charges of graft on the part of those who might be unable to get their goods handled through the public dipensaries. I think it is important to avoid as much controversy as possible of a nature that could not fail to embarrass the governmental officials in their work, It is my' conviction that the liquor should be handled as nearly on the same basis as groceries and other products as possible. I do not favor monopolies of any kind, public monopolies or otherwise, if they can be avoided. 1 truly believe that the Legislature ought to provide for some sort of licensing system and that the hard liquor licenses and beer licenses should be handled by the same authority. Most of the troubles that have arisen in connection with the sale and distribution of liquor, hard and light, have been on account of failure in enforcing the laws and regulations. That is something that 'is outside of the powers of the authorities who have had to make the rules and regulations. The only law enforcing agencies that we have had are United States Department of Justice officials and municipal governments in the incorporated towns. Those agencies have been gradually working out effective plans and enforcement has been improving. I believe it will continue to improve. The Territory has beer: funetioning on this subject less than a year and it takes time to work out problems such as this one. The Legislature might with profit. consider the ad- .visability of having an investigating and enforcement organization directly responsible to whatever liquor author- ing second among the industries of the Territory, is worthy jity it creates. This organization could be small, probably of the most serious consideration by the Legislature. I{one man to a Division, or a distribution based on population believe something should be done to increase the spreadjor the number of licenses issued. This organization should and production of mining. There ought to be many|in no way relieve the police in the municipalities or the new mines, not only to expand the employment, but|United States Marshal’s offices from their duties as pre- to take the places of the older -mines when they are|secribed by present laws and regulations or future laws which worked out. Phe Territory’s mining organization ought{you may enact for enforcement. However, they could re- to have enough money to function efficiently and ef-|port instances of violation to the local police or Marshal's fectively to aid in developing mining activities and tofoffice and liquor board; also they could investigate alleged provide for replacement of worked out properties. It is|violations and complaints by citizens and turn their in- probable that a small tax on mining industry would take|formation over to the police authorities and advise what- care of the needed costs for this work. In providing for|ever liquor authority you may create so that the individual taxation of mines, as in other industries, it must be borne|cases could be followed through and satisfactory enforce- They also could gather information tries. Too much taxation could very easily curtail the{that would be useful to the liquor authority in issuing activity of miners already employed and deter any new|licenses. investment of capital and the immigration of miners. { PULP AND PAPER The increased price of gold has focused much atten- For a great many years the people of Alaska have tion on Alaska from prospective investors and developers.|struggled to get a pulp and paper manufacturing industry It is of vital importance that the Territory’s mining established in Alaska. For years. the task -was. to B service, as may be necessary and proper for the purpose of carrying the provision of this Act into effect: Provided, That such minimum standards of service are not less thfig the highest maintained by the States or Territories wit! which said contract or contracts, as herein provided, are executed.” A committee from the Interior Department, including representatives of the Bureau of Indian Affairs, has been at work on plans to carry this law into effect. 1 heartily agree with the purpose of this statute. I do not believe it will be possible to get a satisfactory arrangement for schools and welfare work in Alaska until there is con- solidation of authority for both the white people and the Indian people. Two Bureau of Indian Affairs represen- tatives were scheduled to visit Alaska. Several dates have been set for their probable arrival here to take up with the Governor’s Office and other Territorial officials a plan of cooperation under this law. The last report was that they, Mr. Ryan and Mr. Gordon, would be here about Decem- ber 1. I nave waited for a conference with those repre- sentatives before attempting to work out a plan of operation. P The failure of the attempts to have a conference makes it difficult to comment upon school and welfare work. I would like to submit a plan to the Legislature, particularly if additional legislation were required, as, mo doubt, it will be. It might be feasible for the Legislature to authorize the Governor and tiie’Commissioner of Educa- tion to represent the Territory in making arrangements with the Secretary of the Interior for the cooperation indicated in the Federal statute. Perhaps we know more before the adjournment of the gislature; & For the same reason that we favor the cong tion of welfare work to include both white people :3‘”"' people, I believe that the various Territorial™ welfape organizations ought to be handled by the samé organiza- tion. We have Old Age Allowances, Mother’s Pensions, Indigent Fund, the Board of Children’s Guardians and Fed- eral Relief and they should be carried out in such a way as to provide cooperation all along the line. i Acting under authority of the last Legislature, the Governor appointed a committee to consider the subject of Child Welfare and the matters relating thereto. This com- mittee consists of J. F. Mullen, Dr. H. C. DeVighne, H. G. Watson, Mrs. Frank A. Metcalf and Frank Booth. You will have a report from it. Its report deserves serious con- sideration by the Legislature. I agree with it almost wholly. I think the Legislature should consider it but keep the purpose in mind of consolidating all welfare work under one head as much as possible. It should take into con- . sideration that Congress has authorized the transfer of Indian and welfare work to the Territory, with Federal cooperation in the expenses. The purpose to arrange for a’ cooperative agreement with the Federal Government should be kept constantly in mind when considering any phase of this subject. I think probably that there should not be too many important changes in the laws relating to schools and welfare work until after consolidation intended, by the law of Congress, heretofore quoted, is worked out. For in- stance: I am not in favor at this time of the establishment * of Territorial Industrial Schools. We have schools, indus- trial and otherwise, scattered widely over the Territory with which the Territory might contract for the education and care of children requiring such supervision until the situation becomes more definite and certain. Both in regards to schools and welfare work, con- solidation for efficiency and to eliminate unnecessary dupli- cation is essential. I am working toward this goil and again express the belief that in considering legislation relative to the foregoing, the though of consolidation and cooperation should be kept in mind. - FEDERAL AID RECEIVED .~ For information it is well to, inelude in, this message, because nothing on the subject will appear in any of the v hen ~= (Gontinued oL Page. Geven) < e